Thrifty Thinking: Millennial Money Fix

Heather Boneparth was a stereotypical Millennial Money Problem. As she finished law school she had over $200,000 in debt and a degree that wasn't helping her in the changing job market. Millennials became the largest share of this country’s work force in 2015 and account for nearly $1.3 trillion in annual spending. But given today’s political climate, bailouts and loan forgiveness are unlikely to solve anything.

I recently had a chance to review The Millennial Money Fix, a book that shows readers what they should have known and what they need to know now about higher education, loan debt, goal setting, cash flow, career planning, side hustling, starting a family, reaching financial independence, and looking forward to the changing face of retirement. It was a good refresher in some ways, and also provided new information. I liked the perspective on how investing and retiring are going to look different for today's young adults than they did for previous generations. I also had a chance to interview to learn more.

What are some financial obstacles that hit millennials particularly hard?

There are four main financial obstacles that Millennials face. The first is that, like all generations, is that we are not financially educated. Without this important knowledge we are having to make very important uninformed financial decisions, such as attending college. We're talking about something that costs tens to hundreds of thousands of dollars, so this second obstacle can be a big one, especially if we are taking out massive amounts of student loan debt to pay for something that we think is our right. So student loan debt is number three and it's preventing us from saving for things like homes, families and retirement. Lastly, navigating the labor environment is something that is particularly challenging considering. Long gone are the day of working for someone for 30 years, receiving a pension and gold watch. We must curate our own careers. It's not easy.

How can millennials navigate the changing job market?

Millennials need to be honest with themselves about their goals and their skill sets. By understanding what you're good at and where you can apply yourself to generate the most productively, you can turn the challenges of today's job market into a sustainable career path or a serious of jobs that touch on the same set of skills. Millennials want impact because we've educated ourselves at the expense of a great deal of time and money. We feel we deserve not to settle for anything less than what our hard work should bring. But again, we have to be honest with where our talents can take us. Not everyone can be a leader or their own boss, not everyone is going to change the world, but you can find avenues that embrace your desire to cause change or have impact, even if it is part of a traditional corporate model.

What is the impact of side hustles?

Side hustles are having a big impact on today's working environment and the ability for Millennials to overcome the financial challenges they are facing. Technology has allowed us to do more in less time and pursue things that were never once thought possible. Now, you can work a 9 to 5 job, comes home and get to work on your side business. Like our grandparents before us, the entrepreneurial spirit is alive and well. It fact it's thriving. We're disrupting traditional industry left and right. I believe that this is the result that comes from applying pressure to our generation. We're don't give up, we put our thinking caps on and find new ways to produce and deal with the challenges we face. The rise of the gig economy is evidence of that.

How do investments fit in to a millennial money plan?

Our mantra is that you must earn the right to invest. This means that you've completed essential planning steps before you would put any risk on your hard earned savings. Only after you've identified, quantified and prioritized your goals, mastered cash flow and build a cash reserve, have you earned the right. Other than taking advantage of matching contributions from your employer's 401(k) (assuming you have one), this is the foundation you need to have in place before investing a single dollars. Without knowing what you want our how you are going to get it, what's the point in investing. The likelihood that you're going to make a mistake is far greater without first laying down the right foundation.

What does the new retirement look like for many people?

We call it financial independence and it will look nothing like what we saw for our grandparents. It's about having the freedom to choose what you want to do in life by having a solid understanding of where you are financially and what you need to do to remain independent. For many it might mean still having to work, but it also means being able to work on their terms or doing something you want to do, not something you have to do.

Douglas Boneparth, CFP^®, MBA, is the founder and president of Bone Fide Wealth, a New York City wealth management firm focused on young professionals and entrepreneurs. He was named to the InvestmentNews Top “40 Under 40” and serves as the CFP^® Board Ambassador for New York. Douglas is a valued media source on Millennials and their money. Visit his Press Page and Twitter for more on what he’s thinking.

Heather Boneparth, Esq., is his marketing manager, chief life counsel, and wife. In early 2013, she left the grip of private firm practice to pursue a more sustainable existence in the corporate insurance world. Her side hustle grew strong, as she wrote this book with Douglas while out on maternity leave from her job. If she was The Millennial Problem, this book was her Fix.

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The third annual “40 Under 40” project spotlights 40 dynamic honorees, all under age 40, who were selected from a pool of approximately 800 nominees by a panel of reporters, editors, and other representatives of InvestmentNews. Winners were chosen based on their level of accomplishment, contribution to the financial advice industry, leadership, and promise for the future. For more information visit www.investmentnews.com.